Flipper/Rehabber · Mechanicsburg, PA · Member since 2013 · 189 posts · 84 votes
My fiancée and I went to a local sheriff sale today strictly as spectators with an interest in bidding next time. I found several things to be confusing.
1. The attorney who was representing the property always opened the bidding at $1 and won 9/10 times with a $1 bid. What does the attorney do with those properties? Are they for his personal use?
2. When there was a competing bidder it was never $2. It went straight to some odd number like 43,701. Where r those numbers coming from?
3. There were 40 people there but only the same 5 guys would actually bid. We're the rest just spectators like me?
4. Why do people allow so many properties to sell for $1? It seems hard not to profit on a price like that.
5. I intend to bid next time around on a property either to use as a rental or a flip. What precautions should I take? Obviously a title search and any type of inspection of the property I can do but what else?
Investor · El Paso/Socorro, TX · Member since 2012 · 365 posts · 75 votes
12y
Hi Jeremy. One big Gotcha is liens, suites, and other encumbrances. Ok, technically more than one Gotcha. The ones that went to a big number are the ones that someone felt were free enough from "Gotcha's" to bid on.
Please talk to a local RE attorney before you bid on anything! You'll need to know which mtg is foreclosing, any other liens that may "stick" to the property, back property taxes, HOA debts, etc.
As to the attorneys bidding $1.....they are NOT buying those properties for $1. that odd number you didn't know, is the minimum bid the bank will let it go for. That is either published or announced somewhere that you don't know about. The attorney is bidding for the bank, not himself. The winning bidder, including the bank has to pay transfer taxes based on the high bid. Therefore, the bank announces "minimum bid to let it go will be $41,128.76" (so in other words if you're not going to bid at least that amount, please don't bother bidding), so that if you were willing to bid $30,000, then the bank had to bid $30,100, they would have to pay the transfer tax on $30,100, not $1.
Flipper/Rehabber · Mechanicsburg, PA · Member since 2013 · 189 posts · 84 votes
12y
thank you Wayne, is the amount you are referring to called the "judgement" on the county website? I seen some sell for less than that number and some for more.
Sheboygan, WI · Member since 2013 · 107 posts · 18 votes
12y
Great info here. The title company in my city charges $50 for the search and rolls that over into title insurance if you purchase it. It sure beats purchasing at auction and getting stuck with liens.
Flipper/Rehabber · Mechanicsburg, PA · Member since 2013 · 189 posts · 84 votes
12y
wow I was quoted $150-200 for a title search in my city. I understand that beats the alternative but I would probably bid on 1/10 properties that I search. Any suggestions to find a better rate?
Flipper/Rehabber · Mechanicsburg, PA · Member since 2013 · 189 posts · 84 votes
12y
what incentive would the attorney have to tell me the minimum bid? Could they lie to get me to bid higher? I don't see y you would just bid what they tell you and not test it out. Normal bidding is in increments. You don't bid 43900 after somebody bids $1. How would you know you couldn't have won the auction with a $500 bid?
Sheboygan, WI · Member since 2013 · 107 posts · 18 votes
12y
Wayne posted that that may be published elsewhere. Perhaps on the posting at the courthouse. In our county, they often have a minimum right on the flyers for each property.